Invisible Banking - Challenger Banks - do they know their Tom?

To me "Invisible Banking" is what we all deserve and would be ecstatic to have. It's the concept of banking happening in the background, empowering your Money Moments (TM) and ensuring your life is flowing smoothly. 

A few years back while still with Meniga we put together a feature for Finovate called Peace of Mind Banking. After showing off our very awesome PFM solution and winning Best of show the year before, we were now wanting to go the extra mile, design and execute on the future of digital banking - automation for the benefit of the consumer.

It was very simple - only manage your finances by exception. Unless something new and unpredicted happens, your bank knows what Money Moments await once you get paid - paying bills, regular transfers to savings accounts, etc and there is no reason not to do those things for you, automatically leaving you free to only manage disposable income while looking at yet another guilt inducing pie chart showing you how much Starbucks you shouldn't have had (yes, a pie chart -this was 2012!).  

Furthermore and maybe most interestingly - a bunch of the underlying banking services could be redefined - why ever be overdrawn if the bank can ensure you are not and move money between accounts on your behalf to avoid it? Why keep funds blocked in a savings account with a lesser yield when your bank launches a better offer and not ensure it is always dynamically moved between accounts so you get the best rate?

Never have to perform tedious banking tasks, only keep an eye on expenses depending on what's Free to Spend, never be penalised for late payments and ensure your Savings are "the best they can be". All of that magic. All perfectly and easily doable on top of the back-end of any bank. Sublime, Invisible Banking.

You'd think this revolutionary idea is now common place in banks around the world, right? That surely banks found a way around the fact that this will assassinate their traditional profit venues (maybe by charging for this service, heaven knows some of us would pay for it!) and are offering it as an alternative to the traditional online bank, right? Wrong. This went to FinTech Good Idea Heaven (same place where you'll find ToBuyOrNotToBuy for example). 

Today, 3 years later, some of the challenger banks will attempt this model (such as Secco Bank) and we get almost as giddy hearing "Invisible banking" and "Robo-advisory" as we do when we talk Blockchain but I worry. I worry for two reasons.

First of all I worry that while incumbents didn't execute on this because they are slow and sluggish and terminally afraid of attacking existent trailed and tested business models, challenger banks have a very different hurdle - technology. Even if they haven't ignored my Open Letter to the Challenger Banks (and sadly most have done so) the likelihood of them becoming a primary bank to their consumers is nearly zero, they will be a secondary or tertiary addition. This, coupled with the lack of automatic account aggregation means they won't have anyone's full life picture - they won't know enough about Tom to Invisibly Bank for him and don't even started on how they won't be able to set up his direct debits. 

Lastly I have a very different kind of worry. I worry this Invisible Banking super power is something us FinTech geeks get excited about and not something that Tom really wants. Tom may very well, conceivably, want the very opposite: control. Clearly presented, informational, easy to interact with, very present, very visible banking.

Let us hope, for the love of all that's FinTech holy that I worry for nothing. 

This is dedicated to the otherwise amazing Yann Ranchere and in particular the one and only David Brear and all the other dreamers who believe in intrinsic FinTech Invisible Banking goodness and light and believe every Tom to be just like them.